Labor Unions Soften Minimum Wage Demand

Labor unions have agreed to lower their demand for next year’s minimum wage hike in the all-important garment sector as a vote on the new wage approaches. However, they are yet to significantly narrow the gap between the figure being put forward by the government and factories.

The Labor Advisory Committee (LAC), made up of representatives from the unions, factories and government, is scheduled to vote in October on a new minimum wage that will take effect in January. Bilateral meetings among the three parties have been ongoing since August.

At the latest meeting between unions and factories on Monday, the unions agreed to drop their original demand—which topped out at $177—to $150.

Som Aun, director of the National Union Alliance Chamber of Cambodia, said the figure was a fair compromise between the needs of the workers, who must make a living, and those of the factories, which need to turn a profit.

“We need to balance workers’ living conditions and market conditions. Too much of an increase could cause some factories to lose revenue and have to shut down, and workers would have no work to do,” said Mr. Aun. “A $150 wage, along with other bonuses, would give workers between $180 and $190 and give them a better living than before.”

The unions also claimed that the Garment Manufacturers Association in Cambodia (GMAC), which represents the factories on the LAC, settled on a new target of $110 at Monday’s meeting after having previously considered $115.

GMAC chairman Van Sou Ieng on Thursday confirmed that the factories were set on $110, which matches the government’s position, but denied ever offering any more than that.

He also saw little encouragement in the union’s scaled-back offer.

“[It’s] not useful because it is not possible for us to accept,” he said.

The factories say that labor unrest in the industry has already caused a significant drop in orders and insist that meeting the unions’ wage demands would force factories to shut down and leave the country.

(Additional reporting by Zsombor Peter)

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